FACT SHEET: U.S.-China Economic Issues

The United States and China share one of the most important trade and economic relationships in the world. The U.S. exports $100 billion of goods and services to China, making China our largest trading partner after Canada and Mexico. Those exports support more than half a million U.S. jobs. China’s GDP growth is expected to have reached 10 percent in 2010, and U.S. goods and services exports to China are growing almost two times as fast as overall U.S. goods and services exports. We seek to base our relationship on mutual prosperity, respect for the rules-based trading system, and a deep commitment to resolve outstanding economic issues. President Obama and President Hu took note of the following commitments to strengthen the U.S.-China trade and economic relationship.

Private sector experts suggest decreasing China’s software piracy rate by 50 percent could increase legitimate software sales by $4 billion. The United States supports China’s commitment to assess and ensure its government’s use of legal software, by, among other measures, 1) allocating government budget funding for legal software purchases, 2) auditing the use of legal software and publishing the results of those audits, and 3) promoting the use of licensed software in private companies and in state owned enterprises through software asset management programs.

The United States welcomed China’s agreement to hold accountable violators of intellectual property on the internet, including those who facilitate the counterfeiting and piracy of others, and to strengthen IPR protections in China’s libraries. China has also agreed to clarify the IPR liabilities of relevant third parties, like landlords, managers, and operators of markets that sell counterfeit products.

Eliminating Discriminatory Innovation Policies

The United States and China committed that 1) government procurement decisions will not be made based on where the goods’ or services’ intellectual property is developed or maintained, 2) that there will be no discrimination against innovative products made by foreign suppliers operating in China, and 3) China will delink its innovation policies from its government procurement preferences.

China agreed to eliminate discriminatory “indigenous innovation” criteria used to select industrial equipment for an important government catalogue prepared by the Ministry of Industry and Information Technology, to ensure that it will not be used for import substitution, the provision of export subsidies, or to discriminate against American equipment manufacturers in Chinese government programs targeting these products.

The United States welcomed China’s commitment to let its “3G” third generation and future technologies develop free of discriminatory technology or standards preferences. China’s 3G infrastructure investment is expected to reach $10 to $12 billion in 2011.

The United States supports China’s commitment to allow foreign companies equal opportunities to participate in the development of the country’s “smart” electric power grid. China committed that purchases of smart grid products and technologies will be made solely on commercial considerations with no discrimination against foreign companies. China also will ensure that foreign stakeholders have full opportunities to participate in an open, transparent process for establishing smart grid standards. China also committed to make purchases solely on commercial considerations. China plans to spend $10 billion annually on smart grid investments.

China committed to submit this year a robust revised offer to join the Government Procurement Agreement (GPA).

China committed that its revised GPA offer would include not just commitments for central government purchases, but also purchases by sub-central entities. The Chinese central government has indicated that it alone procures more than $88 billion in goods and services annually; sub-central entities’ procurement is even more significant.

The United States and China are building on their successful and growing agricultural trade relationship. U.S. agricultural exports to China last year exceeded $12 billion, including soybeans, cotton, and wheat.

The United States welcomed China’s December 2010 lifting of Avian influenza-related bans on U.S. poultry products from Idaho and Kentucky, and urged prompt action to lift the four remaining U.S. state-level bans.